State says IDA needs improved ethics disclosure

Thursday

Sep 5, 2013 at 2:00 AM

Leonard Sparks

MONTICELLO — Sullivan County’s Industrial Development Agency is good at monitoring projects and penalizing those failing to meet job creation and retention goals, a state audit found. But the agency is also hampered in its ability to determine if members of its nine-person board have financial interests in projects, according to a report released on Friday. State comptroller’s office auditors referenced the IDA’s vote in July 2012 to approve a sales-tax exemption and property- and mortgage-tax abatements for M.L. Zager, P.C. to buy and renovate a Monticello property for its new headquarters. The debt collection business is partly owned by Joe Loughlin, the husband of Suzanne Loughlin, an IDA board member.Suzanne Loughlin was absent for the vote, but auditors said the board is hampered in its ability to determine conflicts partly because the financial disclosure forms IDA members file with the county are sealed and not reviewed by the agency’s board. “SCIDA officials told us the reliance on these financial disclosures filed with the County is the only method in place, aside from Board members volunteering such information, to determine if any officials have an interest in potential projects,” the state said.Legislator Ira Steingart, who chairs the IDA, said the agency would hire a lawyer to write a memorandum listing the ethics rules applicable to board members and synthesizing varied state and local ethics rules.

Board members will also be required to take ethics training, and the agency will create a more detailed ethics disclosure section for its application, Steingart said. “We’re just adding another level of reassurance that there’s no conflict,” he said. Auditors reviewed five projects with job-creation and retention obligations and found the IDA holding projects to their agreements. It reviewed five projects who had their payment-in-lieu-of-taxes increased by a total of $230,000 for falling short of hiring goals“If they don’t meet the criteria, we add to the cost of their PILOT payments,” Steingart said. The agency has also been successful in increasing the tax value of properties by granting abatements to businesses who make improvements, the state found. Three sample projects – Catskill Distilling, MG Catskill and Plastic Technologies of New York – have so far paid an accumulated $1.6 million to municipalities and school districts under their PILOT agreements. The amount is $970,000 more than those properties would have generated in taxes without improvements, the audit said. “We really are a best-case scenario,” he said. “They want to use a lot of things that we do.”